Funding is requested for a three year project to study patterns of drug and alcohol use in severely mentally ill patients experiencing inpatient hospitalization for an acute episode, the relationship of such patterns of substance use to levels of psychiatric symptomatology, general functioning and service utilization in a longitudinal fashion. In addition, the effectiveness of a manual-guided drug counseling program, described in the body of the proposal, incorporated in 5 full-service inpatient psychiatric unit, will be examined. Comparisons will be made between substance abusing and non-substance abusing, psychiatric patients in year 1 of the project. In year two, substance abusing psychiatric patients participating in the innovative drug counseling program will be compared with those studied in year one who received standard treatment. For both phases of the study, 3 month and 9 month follow-up data will be collected. This project is planned as the initial phases of an ongoing research program to study substance abuse in the severely mentally ill. Long term objectives include providing a measure of prevalence of different patterns of substance use in this population, refining and developing reliable and valid instruments to assess substance use and developing a typology of substance abusing severely mentally ill in order to better target services. The systematic testing of a new treatment approach may lead to improvements in service delivery to this group of clients.